Not only is natural gas for power generation becoming increasingly expensive – with prices projected to rise further through to 2020 in the UK – but for geopolitical and environmental reasons, some cities are beginning to question where natural gas belongs in their energy mix at all, and for how long.
Some are going further still by planning a complete natural gas phase out by the year 2050. In this post we’ll explore this idea as well as the heating implications for small and medium-sized businesses.
Amsterdam, Vancouver to phase out natural gas heating by 2050
For example, the city of Amsterdam made headlines this week by announcing plans to phase out natural gas powered heating by 2050. That might seem like ages from now, but the city also announced that by the end of next year it plans to remove gas supplies from 10,000 public housing units and build 2 new neighbourhood districts without any connection to the natural gas grid. It is estimated that by 2020, more than 100,000 homes will be supplied by a centralised district heating system rather than each creating their own gas-powered heat.
District heating has been largely successful in Sweden, a country where natural gas for power generation represents less than 1% of the total energy mix. In 2014, Sweden consumed 10 TWh of natural gas, the same net amount it exports as electricity. Only 2 cities, Gothenburg and Malmö, are even connected to the European natural gas grid (from Denmark).
The Canadian city of Vancouver made a similar announcement earlier this year when its city council moved to ban natural gas from homes and restaurants. By 2050, Vancouver hopes to be carbon-free, thanks in part to a 90% reduction in natural gas use.
As part of its Renewable City Strategy, the July decision was made to ban new buildings from using natural gas powered heating. Older buildings must be retrofitted to use renewable energy. The plan reportedly cuts city-wide building energy use by 30% compared to 2014.
Natural gas phase out: will it impact your business?
Would your business be able to afford a similar shift like the ones planned for Amsterdam and Vancouver? The Director for the Canadian Taxpayers Federation estimates that schools and especially restaurants, the majority of which cook with natural gas, could suffer significantly higher energy costs if they are forced to switch to electric heating – on the order of $3.5 million a year.
As one Vancouver resident and small business owner noted, how are small businesses going to handle this change? “No one knows,” said Ian Tostenson of the B.C. Restaurant Association. “It creates uncertainty for the small business person.”
Although a lot could change between now and 2050, one practical certainty remains: heating your buildings using gas and thermal sources still represents a major business expense even as cities debate the place of natural gas in the energy mix.
For those stuck with natural gas and other thermal sources in our buildings for the time being, you’ll be interested in watching our webinar on Optimising Thermal, Gas and Fuel Tanks:
Watch this free online session to learn:
- Metering and hardware solutions you’ll need to monitor your gas, thermal and fuel tanks
- How to automate gas and thermal energy analytics for stress-free optimisation
- How to manage fuel tanks remotely with our new Fuel Tank App
